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Back end DTI of 47%. Is it still possible to qualify for a FHA loan?

  • March 11 2011 - Tallyn's Reach
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Answers (11)

Hi kell,
Just returned from Summit County skiing.  Yes, many FHA lenders are up to, even above 50% all without a manual underwrite. Jim
  • March 12 2011
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Contact Nic as Joe suggested.
  • March 12 2011
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David ...Why would I put my reputation on the line if I was not confident that Nic would do all those things that you claim I have no idea he can do.  That being said after doing all those things you suggest, Kell would probably find that Nic is still the one to call.

  • March 12 2011
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Profile picture for David Widlund
I would recommend getting referrals from friends or other professionals you know personally, or do a little research. There are some lenders who have formed business referral networks that are based on mutual favors and not on any actual experience with that lender, or evidence that the service or pricing is even competitive, let alone great.

Sounds a little fishy to me.

Good luck
  • March 11 2011
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The fact that it will NOT be a manual underwrite is what will allow a 47% DTI to become available.  Do yourself a favor and give Nic Netheton a call.  Well respected on this site and located in Colorado.  His link is below

Nic Netherton

  • March 11 2011
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Profile picture for David Widlund
It can happen, but you are kicking out many of the best-priced lenders at that level. It may be easier to get your ratio down a couple of points with a rate buy-down. Once you are at 45% or less, you may have more options. Maybe someone out there will have a slightly better rate which could push you down to 45%.

Good luck.
  • March 11 2011
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Profile picture for Xcapital Inc
This may not require a manual underwrite.  Freddie Mac is approving files for FHA at the 47% levels.  We've even seen some over 50% get approved.  Compensating factors are always helpful (maybe a 401k out there with $45k for example)
  • March 11 2011
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compensating factors and Letters of Explanation since it will be manually underwritten... perhaps strong assets, additional non-claimed income, other credit history, low credit card balances, etc
  • March 11 2011
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AS long as you can demonstrate strong compensating factors and have credit score above 660 many lenders can approve you above the traditional guidelines.
  • March 11 2011
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It is possible, however the rest of your file should be strong.  Meaning good credit scores, reserves,  etc. to compensate for the high DTI.  Unfortunately without seeing the complete file no one can give you a definitive answer other than the lender you are going through
  • March 11 2011
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Definitely still possible.  If you are over 45%, some lenders will maybe want to see a compensating factor (for example, bank statements showing that you have 3 to 6 months worth of payments in the bank)
  • March 11 2011
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